EXHIBIT 10.9
FIRST AMENDMENT AND LIMITED CONDITIONAL WAIVER
TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
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THIS FIRST AMENDMENT AND LIMITED CONDITIONAL WAIVER TO THE FIRST AMENDED
AND RESTATED CREDIT AGREEMENT (this "Amendment and Waiver") is dated as of the
31st day of March, 2000, and entered into among Pacific Gateway Exchange, Inc.,
Pacific Gateway Exchange (Bermuda) Limited (collectively, the "Borrowers"), each
of the Guarantors, Bank of America, N.A., as a Lender and as Administrative
Agent (the "Administrative Agent"), and certain other Lenders party thereto.
WITNESSETH:
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WHEREAS, the Borrowers, the Lenders and the Administrative Agent entered
into that certain $100,000,000 First Amended and Restated Credit Agreement dated
as of November 23, 1999 among the Borrowers, the Guarantors, the Administrative
Agent and the Lenders party thereto (as amended, restated or otherwise modified
from time to time, the "Credit Agreement").
WHEREAS, the Borrowers have informed Administrative Agent that (a) there
have occurred certain Defaults and Events of Default of various provisions of
the Credit Agreement and (b) there may occur certain Defaults and Events of
Default of various provisions of the Credit Agreement;
WHEREAS, the Lenders, the Administrative Agent and the Borrowers have
agreed to waive such Defaults and Events of Default, and such potential Defaults
and Events of Default, and to otherwise make certain changes and amendments to
the Credit Agreement, upon the terms and conditions set forth below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Borrowers, the Lenders, the Guarantors and the Administrative Agent agree as
follows:
SECTION 1. Definitions.
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(a) In general. Unless specifically defined or redefined below,
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capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
(b) Definition of Commitment. The definition of "Commitment" contained in
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Article I of the Credit Agreement is amended and restated in its entirety as
follows:
"Commitment" means the Domestic Commitment, the Foreign Commitment and
the Letter of Credit Commitment, which in the aggregate shall not exceed
$75,641,927.31 at any time.
(c) Definition of Letter of Credit Commitment. The definition of "Letter
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of Credit Commitment" contained in Article I of the Credit Agreement is amended
and restated in its entirety as follows:
"Letter of Credit Commitment" means on any date of determination,
zero.
SECTION 2. Amendment of Section 2.02(a) of the Credit Agreement.
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Section 2.02(a) of the Credit Agreement shall be deleted in its entirety and the
following Section 2.02(a) shall be substituted in its stead:
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written
notice of the applicable Borrower, received by Administrative Agent
not later than 12:00 noon on the date of such Borrowing, in the case
of Advances which are Base Advances. Notwithstanding any other
provision contained in this Agreement to the contrary, each Borrower
agrees that the Borrowers shall not be eligible to request or receive
LIBOR Advances or Refinancing Advances. Each such notice of a
Borrowing (a "Borrowing Notice") shall be by telecopy or telephone,
promptly confirmed by letter, in substantially the form of Exhibit C
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hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be
a Business Day;
(ii) the Type of Advances of which the Borrowing is to be
comprised; and
(iii) the amount of such proposed Borrowing which (A) with
respect to Advances drawn under (I) the Domestic Revolver Loan shall
not exceed the unused portion of the Domestic Revolver Commitment,
(II) the Foreign Revolver Loan, shall not exceed the unused portion of
the Foreign Revolver Commitment less outstanding Letters of Credit and
reimbursement obligations (or if any Letter of Credit or reimbursement
obligation shall be in a currency other than Dollars, the Dollar
equivalent of such currency) and (B) shall in the case of a Borrowing
of Base Advances, be in an amount of not less than $2,000,000 or an
integral multiple of $1,000,000 in excess thereof (or any lesser
amount if such amount is the remaining undrawn portion under the
Domestic Revolver Commitment or the Foreign Revolver Commitment,
respectively).
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Administrative Agent shall promptly notify Lenders of each such
notice. Each Lender shall, before 2:00 p.m. on the date of each Advance
under the Domestic Revolver Loan or the Foreign Revolver Loan hereunder
(other than a Refinancing Advance), make available to Administrative Agent,
at its office at Bank of America Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, such Lender's Domestic Revolver Specified Percentage and Foreign
Revolver Specified Percentage of the aggregate Advances under the Loans, to
be made on that day in immediately available funds.
SECTION 3. Amendment of Section 2.07 of the Credit Agreement. Section
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2.07 of the Credit Agreement shall be deleted in its entirety and the following
Section 2.07 shall be substituted in its stead:
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof,
each Borrower shall pay interest on the unpaid principal amount of each
Advance from the date of such Advance until such principal shall be paid in
full, at the Base Rate in accordance with the provisions hereof and as
follows:
(i) Base Advances. Base Advances shall bear interest at a
rate per annum equal to the Base Rate as in effect from time to time.
If the amount of interest payable in respect of any interest
computation period is reduced to the Highest Lawful Rate and the
amount of interest payable in respect of any subsequent interest
computation period would be less than the Maximum Amount, then the
amount of interest payable in respect of such subsequent interest
computation period shall be automatically increased to the Maximum
Amount; provided that at no time shall the aggregate amount by which
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interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to this
sentence.
(ii) Payment Dates. Accrued and unpaid interest on Base
Advances shall be paid monthly in arrears on the first Business Day of
each subsequent calendar month and on the Maturity Date.
SECTION 4. Amendment of Section 2.11(d) of the Credit Agreement.
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Section 2.11(d) of the Credit Agreement shall be deleted in its entirety and the
following Section 2.11(d) shall be substituted in its stead:
(d) Mandatory Reduction of Commitment Due to Scheduled Amortization.
If the Domestic Borrower has failed to (i) raise $150,000,000 in gross
proceeds from the issuance of High Yield Indebtedness and/or public or
private equity prior to March 31, 2000 and/or (ii) repay the Loans in
accordance with the provisions of Section 2.05(b) hereof and/or (iii)
reduce the Commitment in accordance with Section 2.11(c) hereof, then, on
May 15, 2000, the Commitment shall immediately
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and automatically reduce to $50,000,000, such reduction to be applied pro
rata between the Domestic Revolver Commitment and the Foreign Revolver
Commitment.
SECTION 5. Amendment of Section 2.15 of the Credit Agreement. Section 2.15
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of the Credit Agreement shall be deleted in its entirety and the following
Section 2.15 shall be substituted in its stead:
2.15. Use of Proceeds. The Advances shall be available (and the
Borrowers shall use such proceeds) solely in accordance with the current
pro rata portion of Borrowers' obligations to fund STM-1 measured capacity
payments demonstrated by invoices from the Japan-US consortium in
connection with the Japan-US Agreement or TAT-14 consortium in connection
with the TAT-14 Agreement for such payments.
SECTION 6. Amendment of Section 8.01(a)(i) of the Credit Agreement.
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Section 8.01(a)(i) of the Credit Agreement shall be deleted in its entirety and
the following Section 8.01(a)(i) shall be substituted in its stead:
(i) Prior to the issuance of any High Yield
Indebtedness, at all times until the Obligations have been
repaid in full and the Commitments have been terminated, the
Borrowers shall not permit Total Debt to be more than
$150,760,000.00.
SECTION 7. Amendment of Section 8.01(c) of the Credit Agreement.
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Section 8.01(c) of the Credit Agreement shall be deleted in its entirety and the
following Section 8.01(c) shall be substituted in its stead:
(c) Minimum Operating Cash Flow. The Borrowers shall not
permit Operating Cash Flow for the Borrowers and their Subsidiaries on
a consolidated basis for the following periods of determination to be
less than the amounts set forth opposite such periods indicated below:
Period Amount
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October 1, 1999 through $ 6,000,000
December 31, 1999
January 1, 2000 through $ 1,200,000
March 31, 2000
April 1, 2000 through $11,300,000
June 30, 2000
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July 1, 2000 through $ 9,000,000
September 30, 2000
SECTION 8. Deletion of Section 8.01(d) of the Credit Agreement.
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Section 8.01(d) of the Credit Agreement shall be deleted in its entirety and the
following Section 8.01(d) shall be substituted in its stead:
1. INTENTIONALLY OMITTED.
SECTION 9. Amendment of Section 8.01(e) of the Credit Agreement.
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Section 8.01(e) of the Credit Agreement shall be deleted in its entirety and the
following Section 8.01(e) shall be substituted in its stead:
(e) Capital Expenditures. The Borrowers shall not permit
Capital Expenditures related to non-STM-1 expenses to exceed the
agreed financial forecasts described below for non-STM-1 payments for
such fiscal quarter. The Borrowers shall not permit Capital
Expenditures related to STM-1 payments of the Borrowers and their
Subsidiaries to exceed the amount demonstrated by invoices from the
Japan-US or TAT-14 consortiums for such current payments under the
Japan-US Agreement or the TAT-14 Agreement.
Fiscal Quarter Ending Non STM-1 Amount
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December 31, 1999 $14,740,000
March 31, 2000 Existing Capital Expenditures
as of March 31, 2000
June 30, 2000 $ 8,000,000
September 30, 2000 $ 8,000,000
SECTION 10. Amendment of Section 8.02 of the Credit Agreement. Section 8.02
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of the Credit Agreement shall be deleted in its entirety and the following
Section 8.02 shall be substituted in its stead:
8.02. Debt for Borrowed Money. The Borrowers shall not, and shall
not permit any of their Subsidiaries to, create, assume, incur or otherwise
become or remain obligated in respect of, or permit to be outstanding, or
suffer to exist any Debt for Borrowed Money, except:
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(a) with respect to the Borrowers and their Subsidiaries, Debt for
Borrowed Money under the Loan Papers; and
(b) with respect to the Borrowers and their Subsidiaries, Debt for
Borrowed Money in existence on March 31, 2000 and not otherwise permitted
pursuant to the terms of this Section 8.02, in each case only in the
principal amounts and as such Debt for Borrowed Money exists as of such
date.
SECTION 11. Amendment of Section 8.05 of the Credit Agreement. Section
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8.05 of the Credit Agreement shall be deleted in its entirety and the following
Section 8.05 shall be substituted in its stead:
8.05. Liquidation, Disposition or Acquisition of Assets, Merger, New
Subsidiaries. The Borrowers shall not, and shall not permit any of their
Subsidiaries to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, Properties or business
other than (i) Permitted Asset Sales, (ii) any sale, transfer, liquidation
or dissolution of any Subsidiary, provided the assets of that Subsidiary
are transferred either to the Foreign Borrower or an Approved Subsidiary,
(iii) transactions permitted in Sections 8.04(i) and (j), and (iv)
transactions described in Section 8.18 with respect to the Onyx Entities.
(b) except as permitted in Sections 8.04(i) and (j) hereof, acquire
any assets, Property or business of any other Person, or participate in any
joint venture, except (i) assets and Property acquired in the ordinary
course of business, and (ii) provided that the Foreign Borrower and
Approved Subsidiaries comply fully with Section 6.11 hereof, and upon the
execution and delivery of the required Loan Papers, Permitted Acquisitions
may be consummated by the Foreign Borrower and Approved Subsidiaries.
(c) enter into any merger, amalgamation, or consolidation, except
that, so long as there exists no Default or Event of Default and none is
caused thereby, after delivery of prior written notice to the
Administrative Agent, the Onyx Entities may enter into the transactions
described in Section 8.18 hereof.
SECTION 12. Amendment of Section 8.13 of the Credit Agreement. Section 8.13
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of the Credit Agreement shall be deleted in its entirety and the following
Section 8.13 shall be substituted in its stead:
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8.13. Limitation on Restrictive Agreements. The Borrower shall not,
and shall not permit any Restricted Subsidiary or Bermuda Corp. to, enter
into any indenture, agreement, instrument, financing document or other
arrangement which, directly or indirectly, prohibits or restrains, or has
the effect of prohibiting or restraining, or imposes materially adverse
conditions upon the acceptance of a waiver or consent, or the agreement to
an amendment or change, by either of the Borrowers, with respect to any
term or provision of this Agreement or any other Loan Paper. Except in
connection with the issuance of Debt under Section 8.02 hereof, the
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Borrowers shall not, and shall not permit any of their Subsidiaries to,
except as otherwise described on Schedule 8.13 hereto, enter into any
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indenture, agreement, instrument, financing document or other arrangement
which, directly or indirectly, prohibits or restrains, or has the effect of
prohibiting or restraining, or imposes conditions (which are no more
restrictive than those contained herein) upon: (a) the incurrence of
indebtedness, (b) the granting of Liens, (c) the making or granting of
Guarantees, (d) the payment of dividends or Distributions, (e) the
purchase, redemption or retirement of any Capital Stock of such Borrower or
any Subsidiary of either Borrower, (f) the making of loans or advances, (g)
transfers or sales of Property or assets (including Capital Stock) by
either Borrower, or any of their Subsidiaries, (h) the making of
Investments or (i) any change of control or management.
SECTION 13. Amendment of Section 8.18 of the Credit Agreement. Section 8.18
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of the Credit Agreement shall be deleted in its entirety and the following
Section 8.18 shall be substituted in its stead:
8.18. Onyx Transactions. So long as there exists no Default or Event
of Default both before and after giving effect to any of the transactions
otherwise permitted under this Section 8.18, upon adequate written notice
(as determined Administrative Agent's sole discretion) to the
Administrative Agent for the Administrative Agent to take such reasonable
and necessary actions in order to retain perfection on all assets that are
pledged to the Administrative Agent on behalf of the Lenders as of March
31, 2000, then notwithstanding anything to the contrary in this Credit
Agreement or any security agreements, pledge agreements, share charges or
any other Loan Paper that creates or authorizes a lien, pledge, mortgage,
charge or debenture on the shares of the Onyx Entities or the assets of the
Onyx Entities, the following transactions shall be permitted, subject to
the limitations specifically set forth below, without any further consent
of the Lenders.
(a) Asset Transfers. Prior to the occurrence any of the other
transactions set forth in this Section 8.18, shares in or assets of all or
any of the Onyx Entities may be transferred to another Onyx Entity;
provided that, except as set forth in subsection (b), the resulting Onyx
Parent Company must be a direct, wholly-owned Subsidiary of either the
Domestic Borrower or the Foreign Borrower and its shares
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must be pledged or charged by the Domestic Borrower or the Foreign
Borrower, as applicable, to secure such Borrower's Obligations under this
Credit Agreement.
(b) Issuance of Equity Securities. The Onyx Parent Company may
issue equity securities, in a public or private placement, equal to at
least 5% but not greater than 35%, of the then outstanding equity interests
of such entity without making a mandatory prepayment or causing a
Commitment reduction under Article 2 of this Credit Agreement. Concurrently
with the closing of any such issuance, the Administrative Agent, on behalf
of the Lenders, shall:
(i) Release any and all rights the Administrative Agent or
the Lenders may have under Unlimited Guaranties executed by any Onyx
Entity;
(ii) Release any and all rights the Administrative Agent or
the Lenders may have under security agreements, pledge agreements,
share charges or any other Loan Paper that creates or authorizes a
lien, pledge, mortgage, charge or debenture on the assets owned by the
Onyx Entities, including any equity interests in one Onyx Entity held
by another Onyx Entities;
(iii) Execute any and all releases, termination statements and
such other documents or instruments as may reasonably be required to
effectuate the foregoing; provided that, the applicable Borrower or
the Onyx Parent Company shall pay the Administrative Agent's
reasonable costs and expenses (including legal counsel) related to
such releases, and provided further that nothing in this subsection
(b) shall require Lender to release the pledge of or charge on the
shares of the Onyx Parent Company.
SECTION 14. Existing and Potential Defaults and Events of Default and
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Limited Conditional Waiver. The Borrowers have informed the Administrative
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Agent that they are seeking a conditional and limited waiver of certain of the
provisions of the Credit Agreement and that there has occurred certain Defaults
and Events of Default, and that there may occur certain Defaults and Events of
Default. In particular, the Borrowers have informed the Administrative Agent
that:
(a) Existing Defaults and Events of Defaults.
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(i) Total Leverage Ratio Event of Default. For the period from
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January 1, 2000 through March 30, 2000, the Borrowers exceeded the
Total Leverage Ratio of 3.00 to 1.00 in violation of Section 8.01(a)
of the Credit Agreement.
(ii) Operating Cash Flow. The Borrowers' failed to meet the required
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minimum Operating Cash Flow covenant for the period ending December
31, 1999 of $6,000,000 in violation of Section 8.01(c) of the Credit
Agreement.
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(iii) Capital Expenditures. The Borrowers' incurred Capital
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Expenditures during the fiscal quarter ending March 31, 2000 in excess
of $8,000,000 in violation of Section 8.01(e) of the Credit Agreement.
(iv) Debt Incurrence. The Borrowers' incurred Debt for Borrowed
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Money of (i) $2,700,000 under the Cisco loan agreement and (ii) all
other Debt for Borrowed Money (including Advances borrowed under the
Credit Agreement) incurred by the Borrowers after the date of the
borrowing described in subparagraph (i) above, in each case during the
existence and continuation of a Default or Event of Default and in
violation of Sections 8.02(f) and 8.02(g) of the Credit Agreement,
including, but not limited to, the Inktomi Agreements.
(v) Certification. In connection with each Advance described in
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subparagraph (iv) above, each of the Borrowers certified pursuant to
the relevant Borrowing Notice that no Default or Event of Default was
in existence in violation of Section 9.01(b) of the Credit Agreement.
(vi) Notification. Each of the Borrowers' failed to promptly to
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notify the Administrative Agent in writing of each Default and Event
of Default outlined in this paragraph 14 in violation of Section
7.05(b) of the Credit Agreement.
(b) Potential Defaults and Events of Defaults.
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(i) Auditor's Opinion. Borrowers have informed the Administrative
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Agent that Section 7.02 of the Credit Agreement may be breached by the
Borrowers as a result of the possibility of a comment of the Auditors
regarding the Borrowers' viability as a going concern in the opinion
of the Auditors rendered in connection with the1999 audited financial
statements of the Borrowers.
(c) Limited and Conditional Waiver. The Administrative Agent and
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the Lenders agree, on a one time only basis, to waive the Defaults and the
Events of Default, and the potential Defaults and the Potential Events of
Default outlined in subparagraphs (a) and (b) of paragraph 14 above (the
"Existing and Potential Defaults and Events of Defaults"), provided that
the Borrowers and each other party to this Amendment and Waiver meet each
of the conditions, representations, warranties and covenants contained
herein and each of the other Loan Papers.
SECTION 15. Conditions to Limited Conditional Waiver. Each of the
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foregoing waivers to the Existing and Potential Defaults and Events of Default
are hereby expressly subject to the satisfaction of each of the following
conditions. The Borrowers specifically acknowledge and agree that the failure
by either or both of the Borrowers to satisfy any of the following conditions
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and covenants shall cause an immediate and automatic Event of Default under the
Credit agreement and shall cause this Amendment and Waiver to be void ab initio:
(a) Operating Cash Flow for the period ending December 31, 1999 shall not
be less than $4,552,000.
SECTION 16. Reservations of the Lenders and the Administrative Agent.
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Notwithstanding (a) the current forbearance of the Administrative Agent and the
Lenders with respect to Existing and Potential Defaults and Events of Defaults
and (b) any action or inaction by the Administrative Agent or any Lender or
otherwise, the Administrative Agent and the Lenders expressly reserve all of
their Rights in connection with the terms of the Credit Agreement and the other
Loan Papers and the administration thereof, including, without limitation, the
Right to accelerate the outstanding Obligations, to file suit for collection
thereof, and to exercise any Rights of the Administrative Agent or the Lenders
with respect to the Collateral, except, so long as no other Default or Event of
Default exists and the Borrowers are each otherwise in compliance with all terms
of this Amendment and Waiver, any action taken as a result of only the Existing
and Potential Defaults and Events of Defaults. No delay by the Administrative
Agent or the Lenders in exercising any Rights under the Credit Agreement or the
other Loan Papers or Applicable Law and no failure by the Administrative Agent
or any Lender to exercise any such Right shall operate as a waiver of any Rights
the Administrative Agent or the Lenders may have under the Credit Agreement or
any of the other Loan Papers. The Administrative Agent and the Lenders hereby
reserve their rights to take any action or exercise any Rights available to them
under the Credit Agreement, the Loan Papers and otherwise, now or at any time in
the future except, so long as no other Default or Event of Default exists and
the Borrowers are each otherwise in compliance with all terms of this Amendment
and Waiver, any action taken as a result of only the Existing and Potential
Defaults and Events of Defaults. Any present or future negotiations or
discussions with any representative of the Administrative Agent or any of the
Lenders regarding the Credit Agreement or the Loan Papers or any documents
executed in connection therewith shall not be binding upon the Administrative
Agent or the Lenders unless and until an agreement is in writing and signed by
authorized representatives of the Administrative Agent or the Lenders, as the
case may be. Any and all Rights available to the Administrative Agent and the
Lenders shall be cumulative and may be exercised separately, successively or
concurrently at their sole discretion.
SECTION 17. Representations and Warranties. Each of the Borrowers hereby
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represent and warrant to the Administrative Agent and the Lenders that no Event
of Default or Default under the Credit Agreement or the Loan Papers exists other
than as waived hereunder. The Borrowers and Guarantors furthermore acknowledge
that nothing in this Amendment and Waiver shall affect their obligations under
the Credit Agreement or the other Loan Papers executed in connection therewith
(except as specifically provided in this Amendment and Waiver) including, but
not limited to the 75,641,927.31 outstanding under the Credit Agreement and
other Loan Papers as of March 31, 2000, which remain valid, binding and
enforceable, and except as amended hereby, unamended, or shall constitute a
waiver or consent by the undersigned of any of its rights or remedies (except as
specifically provided in this letter), now or at any time in the future, with
respect to any requirement
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under the Credit Agreement or the other Loan Papers or with respect to an Event
of Default or Default, occurring now or at any time in the future.
SECTION 18. Covenants. The Borrowers covenant and agree to each of the
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items set forth below, and specifically acknowledge and agree that the failure
by either or both of the Borrowers to comply with any of the following covenants
shall cause an immediate and automatic Event of Default under the Credit
agreement and shall cause this Amendment and Waiver to be void ab initio:
(a) the Borrowers covenant that they shall deliver to Administrative Agent
within 14 calendar days from the date hereof, (i) audited December 31, 1999
financial statements and (ii) in connection with (i) foregoing, an unqualified
opinion from the Auditors, other than with respect to a comment regarding
Pacific Gateway Exchange, Inc.'s viability as a going concern;
(b) the Borrowers shall provide monthly financial statements to the
Administrative Agent within 15 business days after the end of each calendar
month together with a Compliance Certificate calculating each financial covenant
contained in Section 8.01, and commencing with the delivery of the April 2000
financial statements, an officer's certificate certifying as to the accuracy of
its representations and warranties in the Loan Papers, certifying that no
Default or Event of Default has occurred under the terms of the Credit Agreement
or other Loan Papers and certifying as to the accuracy of the information
contained in such financial statements;
(c) the Borrowers shall provide weekly cash flow statements to the
Administrative Agent in form and substance acceptable to Administrative Agent
within three calendar days after each Friday of each week;
(d) no later than Monday, April 3, 2000, the Borrowers agree to retain
their own financial consultant or chief financial officer, which Person shall be
responsible for, among other things, assuring at all times the dissemination of
timely and accurate financial data to the Administrative Agent;
(e) the Borrowers shall cause their financial reporting area to cooperate
with the financial consultant retained by the Administrative Agent to assist the
Lenders in a third party evaluation of the Borrower's financial status;
(f) no later than Monday, April 17, 2000, the Borrowers agree to update
the Administrative Agent and the Lenders of the status of the process of raising
equity in Onyx Networks, Inc.;
(g) the Borrowers will deliver a new Schedule 8.02 reflecting all Debt for
Borrowed Money as of March 31, 2000 by April 14, 2000; and
(h) After the issuance of any Onyx Entity equity to any investor, there
are no intercompany obligations between any Onyx Entity and any Affiliate that
is not an Onyx Entity.
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SECTION 19. Conditions Precedent to Effectiveness.
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This Amendment and Waiver shall not be effective until the Administrative
Agent shall have received:
(a) executed signature pages from each Borrower, each of the Guarantors,
the Administrative Agent and all Lenders of this Amendment and Waiver;
(b) copies of all agreements and documents executed or delivered in
connection with this Amendment and Waiver, and any and all consents obtained in
connection herewith, and copies of the executed Inktomi Agreements;
(c) reimbursement by the Borrowers via wire transfer for the
Administrative Agent of its fees and expenses and for Special Counsel's fees and
expenses rendered through the date hereof;
(d) receipt by the Administrative Agent of a retainer in the amount of
$150,000 for the Administrative Agent's financial consultant to be applied to
such financial consultant's fees on a monthly basis;
(e) receipt by Administrative Agent, on behalf of Special Counsel, via
wire transfer, of a retainer in the amount of $100,000 to reimburse
Administrative Agent for legal fees to be incurred by Special Counsel after the
date hereof, such retainer to be held by Special Counsel and applied to Special
Counsel's fees on a monthly basis;
(f) such other documents, instruments, and certificates, in form and
substance satisfactory to the Administrative Agent and Lenders, as the
Administrative Agent and the Lenders shall deem necessary or appropriate in
connection with this Amendment and Waiver and the transactions contemplated
hereby; and
(g) receipt by the Administrative Agent for the account of the Lenders an
amendment waiver and restructuring fee of $100,000.
SECTION 20. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AMENDMENT AND WAIVER AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO
BE CONTRACTS MADE IN NEW YORK, NEW YORK, AND SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCEPT TO THE EXTENT THE
ADMINISTRATIVE AGENT AND THE LENDERS HAVE GREATER RIGHTS OR REMEDIES UNDER
FEDERAL LAW, WHETHER AS NATIONAL BANKS OR OTHERWISE, IN WHICH CASE SUCH CHOICE
OF NEW YORK LAW SHALL NOT BE DEEMED TO DEPRIVE ADMINISTRATIVE AGENT AND LENDERS
OF ANY SUCH RIGHTS AND REMEDIES AS MAY BE AVAILABLE UNDER FEDERAL LAW) AND THE
UNITED STATES OF
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AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWERS AGREE THAT THE
FEDERAL COURTS OF NEW YORK LOCATED IN NEW YORK CITY, NEW YORK WILL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE BORROWERS EACH HEREBY WAIVE ANY RIGHT THAT IT MAY HAVE TO
A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR
OTHERWISE) ARISING UNDER OR RELATING TO THIS AMENDMENT AND WAIVER, THE CREDIT
AGREEMENT AND THE OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. EACH OF
BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER REPRESENTS THAT IT HAS
KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT AND
WAIVER OR THE CREDIT AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE BORROWERS
HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON IT. EACH OF THE
BORROWERS AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO SUCH BORROWER AT ITS ADDRESS DESIGNATED
FOR NOTICE UNDER THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL. NOTHING IN THIS
PARAGRAPH SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 21. RELEASE. THE BORROWERS EACH HEREBY ACKNOWLEDGE THAT NEITHER
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OF THE BORROWERS HAS ANY DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM
OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR
ELIMINATE ALL OR ANY PART OF BORROWERS' LIABILITY TO REPAY THE ADMINISTRATIVE
AGENT OR EACH LENDER AS PROVIDED IN THE CREDIT AGREEMENT OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE ADMINISTRATIVE AGENT OR ANY
LENDER. EACH OF THE BORROWERS HEREBY UNCONDITIONALLY AND IRREVOCABLY REMISES,
ACQUITS, AND FULLY AND FOREVER RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT
AND EACH LENDER AND ALL AFFILIATES AND SUBSIDIARIES OF THE ADMINISTRATIVE AGENT
AND EACH LENDER, THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS,
PRINCIPALS, DIRECTORS AND SHAREHOLDERS, AND THEIR RESPECTIVE HEIRS, LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "RELEASED LENDER
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PARTIES") FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION,
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13
OBLIGATIONS, REMEDIES, SUITS, DAMAGES AND LIABILITIES (COLLECTIVELY, THE
"BORROWER CLAIMS") OF ANY NATURE WHATSOEVER, WHETHER NOW KNOWN, SUSPECTED OR
---------------
CLAIMED, WHETHER ARISING UNDER COMMON LAW, IN EQUITY OR UNDER STATUTE, WHICH THE
BORROWERS EVER HAD OR NOW HAVE AGAINST THE RELEASED LENDER PARTIES WHICH MAY
HAVE ARISEN AT ANY TIME ON OR PRIOR TO THE DATE OF THIS AMENDMENT AND WAIVER AND
WHICH WERE IN ANY MANNER RELATED TO THE CREDIT AGREEMENT OR ANY OTHER LOAN
PAPERS OR THE ENFORCEMENT OR ATTEMPTED ENFORCEMENT BY THE ADMINISTRATIVE AGENT
OR ANY LENDER OF RIGHTS, REMEDIES OR RECOURSES RELATED THERETO. THE BORROWERS
COVENANT AND AGREE NEVER TO COMMENCE, VOLUNTARILY AID IN ANY WAY, PROSECUTE OR
CAUSE TO BE COMMENCED OR PROSECUTED AGAINST ANY OF THE RELEASED LENDER PARTIES
ANY ACTION OR OTHER PROCEEDING BASED UPON ANY OF THE BORROWER CLAIMS WHICH MAY
HAVE ARISEN AT ANY TIME ON OR PRIOR TO THE DATE OF THIS AMENDMENT AND WAIVER AND
WERE IN ANY MANNER RELATED TO THE CREDIT AGREEMENT, ANY OTHER LOAN PAPERS OR THE
TRANSACTIONS ASSOCIATED THEREWITH.
SECTION 22. Miscellaneous.
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(a) This Amendment and Waiver shall be a "Loan Paper" as defined in the
Credit Agreement, and a default under this agreement will result in an Event of
Default under the Credit Agreement.
(b) This Amendment and Waiver may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes, and
all of which constitute, collectively, one agreement; but in making proof of
this consent letter, it shall not be necessary to produce or account for more
than one such counterpart. It is not necessary that all parties execute the
same counterpart so long as identical counterparts are executed by each party.
THIS AGREEMENT AND THE OTHER WRITTEN LOAN PAPERS EXECUTED BY THE PARTIES HERETO
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT
BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
(c) THE CREDIT AGREEMENT AS AMENDED HEREBY AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. EXCEPT AS MODIFIED
OR SUPPLEMENTED HEREBY, THE CREDIT AGREEMENT, THE OTHER LOAN PAPERS AND ALL
OTHER DOCUMENTS AND AGREEMENTS EXECUTED IN CONNECTION THEREWITH SHALL CONTINUE
IN FULL FORCE AND EFFECT.
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REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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15
IN WITNESS WHEREOF, this Amendment and Waiver to the Credit Agreement is
executed as of the date first set forth above.
THE BORROWERS:
PACIFIC GATEWAY EXCHANGE, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
PACIFIC GATEWAY EXCHANGE (BERMUDA) LIMITED
By:______________________________________
Name:____________________________________
Title:___________________________________
THE LENDERS:
BANK OF AMERICA, N.A., as Administrative
Agent and as Lender
By:______________________________________
Name:____________________________________
Its:_____________________________________
BANKERS TRUST COMPANY, individually as a
Lender
By:______________________________________
Name:____________________________________
Its:_____________________________________
16
ACKNOWLEDGED AND AGREED:
THE GUARANTORS:
PACIFIC GATEWAY EXCHANGE JAPAN BACKHAUL INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
PACIFIC GATEWAY EXCHANGE (HONG KONG) LTD.
By:______________________________________
Name:____________________________________
Title:___________________________________
ONYX NETWORKS INTERNATIONAL LTD.
By:______________________________________
Name:____________________________________
Title:____________________________________
PACIFIC GATEWAY EXCHANGE (TAIWAN) LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇) LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE INTERNATIONAL
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (CANADA) INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (IBERIA) SA
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (CYPRUS) LTD.
By:________________________________________
Name:______________________________________
Title:_____________________________________
18
ONYX INTERNET LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (GERMANY) GMBH
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (U.K.) LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (AUSTRALIA) PTY LTD.
By:________________________________________
Name:______________________________________
Title:_____________________________________
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇▇▇▇)
PARTNERSHIP
By: Pacific Gateway Exchange (Bermuda)
Limited, Its General Partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
By: Pacific Gateway Exchange New Zealand
Limited, Its General Partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
By:________________________________________
Name:______________________________________
Title:_____________________________________
PACIFIC GATEWAY EXCHANGE (NEW ZEALAND)
LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
By:________________________________________
Name:______________________________________
Title:_____________________________________
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇) LIMITED
By:________________________________________
Name:______________________________________
Title:_____________________________________
21
Exhibit 1
Inktomi Agreements
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